Tanzanian Court orders contractor to pay EA Cables Sh1.3bn

Dar es Salaam. The High Court (Commercial Division) has ordered a civil engineering company, Spencon Services Limited, to pay East African Cables Limited Sh1.3 billion in unsettled debt for the purchase of electric cables five years ago.

Justice Amiri Mruma said in his recent decision that the plaintiff (East African Cables Limited) has proved her claim of Sh 1.3 billion against the defendant (Spencon).

East African Cables Limited brought a suit against Spencon in 2016, accusing the company of failing to settle a Sh1.3 billion debt, being costs of electric cables it ordered and was supplied between October 2013 and May 2014.

Spencon placed an order and was supplied with conductors which were to be used in the Rural Electrification Project (REA) for Kilimanjaro Services Line.

The cable supplier claimed non settlement of the debt has tied down a substantial part of its capital and caused unnecessary hardship in her operations.

Spencon denied any liability throughout the case, contending that there was no proof of orders, invoices and delivery notice.

Efforts to mediate the parties failed.

“I have carefully internalized and scrutinized the customer statement, the plaintiff’s demand letter and the defendants reply and find that the plaintiff has proved her claim of Sh 1.3 billion against the defendant,” said justice Mruma.

The judge cited a letter addressed to R M Attorney and signed by assistant legal counsel for Spencon Services Limited, one Alice Muigai, as one of the basis for his conclusion. The letter read in part: “We acknowledge that there is a sum outstanding Sh1.3 billion due to your client for conductors supplied to SSL (Spencon Services Limited). We however dispute owing your client Sh 59.3 million in transport cost.”

“In the present case the defendant (Spencon) did not object to admission of the letter as evidence. There is also a deed of settlement in which the same amount is admitted as owing to the plaintiff. I thus find that the plaintiff is entitled to that amount,” said the judge.

The judge rejected the claim of general damages by Est African Cable Suppliers, saying non has been exhibited to bring the case under special circumstances where both special and general damages could be awarded. “I therefore decline to award general damages on top of special damages,” said the judge.

Spenconwas also ordered to pay interest on the principal amount claimed at the rate of 16 per cent per annum from the date the case was filed to date of judgment.